We have two new entries today in the continuing saga of Ivy League and affluent college students trying to delay taking exams on account of their being traumatized by Darren Wilson’s acquittal and Eric Garner’s deaths and their being exhausted by the physical and emotional burdening of taking to the streets to protest those two traumas. The first entry is an overwrought, horribly written, and horribly reasoned essay by a young man who styles himself as a third year Harvard Law Student and editor of Harvard’s Law Review. John Hinderaker fisks this horrible effluvia, so I don’t have to.

I have only one thing to add . . . well, actually two. First, Obama was once a third year Harvard Law Student and editor of the Harvard Law Review. Second, if those two law students — who are separated by more than 20 years — are representative of Harvard Law School I have been right all along in believing that people go into Harvard Law reasonably smart and come out manifestly dumb and, too often, unprincipled.

A Bay Area resident who reads my blog, asked that I publish an open letter to Dr. Jonathan Gruber. Because the letter’s writer has to make a living here in Marin (70% Democrat), she’s writing under a pseudonym. I’m betting that this letter will resonate with many of you:

***

Dear Dr. Gruber,

I watched your panel discussion videos with fascination where you talk about creating Obamacare and how you needed to obfuscate and deceive in order to get it passed. I noticed how you hold the voting American public in contempt, saying how stupid we all are.

After viewing it I thought I would write to you to let you know how your important legislation for which you got paid $400,000 in consulting fees has affected my life. Because when I hear you speak about the voters of this country I don’t get the feeling that you have any understanding or empathy for us. I am sure you have more important things to think about.

The San Jose Mercury News did an article about the sticker shock many Obamacare supporters are experiencing. What was great about this article was this quotation, from an ardent supporter:

Cindy Vinson and Tom Waschura are big believers in the Affordable Care Act. They vote independent and are proud to say they helped elect and re-elect President Barack Obama.

[snip]

Vinson, of San Jose, will pay $1,800 more a year for an individual policy, while Waschura, of Portola Valley, will cough up almost $10,000 more for insurance for his family of four.

[snip]

But people with no pre-existing conditions like Vinson, a 60-year-old retired teacher, and Waschura, a 52-year-old self-employed engineer, are making up the difference.

“I was laughing at Boehner — until the mail came today,”
Brochures and handouts on the Affordable Care Act, also known as Obamacare, are shown at the education outreach booth sponsor by Daughters of Charity O’Connor Hospital at Santa Clara County Library Alum Rock branch in San Jose on Oct. 1, 2013. (Josie Lepe/Staff)
Waschura said, referring to House Speaker John Boehner, who is leading the Republican charge to defund Obamacare.

“I really don’t like the Republican tactics, but at least now I can understand why they are so pissed about this. When you take $10,000 out of my family’s pocket each year, that’s otherwise disposable income or retirement savings that will not be going into our local economy.”

It’s always great to see a few liberals mugged by reality. May there be many more in the coming days and years. Frankly, these people deserve to suffer. I’m sorry to say that, but it’s true. They worked hard to get this monstrosity passed into law, and I hope they suffer horribly because of it. I’m sorry that you, my dear friends, will also have to suffer, because you tried to stop this train wreck. But to the extent we knew it was a train wreck, let me reiterate my fondest desire that every elite liberal I knew is royally screwed. And perhaps because you’re smarter about economic cause and effect, you will come out of this disaster stronger and better than they will.

Okay, I’m done being vindictive. The same article also struck me because I suspect it contains a certain amount of dishonesty and misdirection. I don’t have proof for my theory, just a strong suspicion.

First, read this:

Even those who don’t qualify for the tax subsidies could see their rates drop because Obamacare doesn’t allow insurers to charge people more if they have pre-existing conditions such as diabetes and cancer, he said.

People like Marilynn Gray-Raine.

The 64-year-old Danville artist, who survived breast cancer, has purchased health insurance for herself for decades. She watched her Anthem Blue Cross monthly premiums rise from $317 in 2005 to $1,298 in 2013. But she found out last week from the Covered California site that her payments will drop to about $795 a month.

Can you spot the problem? Before Obamacare passed, Gray-Raine was paying $317. Incidentally, I know that the article is careful to say that her premiums were $317 in 2005, but I’m willing to bet that the dramatic rate hikes started in 2009 when Obamacare passed. As the article concedes, without Obamacare’s market manipulation, rates tended to go up by about 4% annually. I’m lousy at math, but it seems to me that a 4% annual increase on a $317 monthly premium would see her paying $434 per month by 2013.

Something happened in 2009, of course, to change that typical trajectory. 2009 is when insurance companies responded to the fact that Obamacare, instead of allowing them to sell true insurance based upon risk analysis, forced them to prepare for cost-shifting mode. They knew that, come 2013, insurers will have to pay for everybody’s care (including maternity care for old men), regardless of risk factors. The moment the law was passed, and with increasing aggression as the law’s implementation loomed, insurers responded in the only logical way — by raising premiums. That’s almost certainly the explanation for Gray-Raine’s huge premium increase, one that saw her paying $981 more in 2013 than before Obamacare. Gray-Raine professes herself thankful that she’s going to be paying $795 less than she was paying last month, but she seems to have lost sight of the fact that she’s still paying almost $200 more per month than before the government meddled with the marketplace.

In an earlier post, I asked several questions about economic issues that confuse me. Robert Arvanitis wrote a comprehensive reply, but then couldn’t get the Word Press comment system to accept it. Because it is so comprehensive and informative, I’m putting it up here as an independent post. All that I ask of the rest of you is that you don’t let its length and depth dissuade you from chiming in with your own two cents (or, with inflation, four cents) on the subject. There’s a lot to be said here.

And now . . . Robert Arvanitis:

Why, if the economy is contracting and the labor market is flat-lined, has the stock market gone up?

Will the stock market stay up (long-term and short-term predictions, please)?

In normal times, the stock market is a reflection of true economic activity; stocks typically trade at multiples of earnings from 10 to 14 times. So the yield is the inverse of that — if you pay $10 for $1 yield, that’s a 10% return. Likewise if you invest $14 to get $1 then that’s like a 7% return. That’s the norm, 7-10% for “risky” equities in contrast to the “safe” bond yields of 3-4% or “really safe” bank accounts at 2-3%.

Alas, we are not in a yield-trading market. Rather, we are seeing the impact of inflation caused by printing of money at the Fed. Our GDP, the value of everything we produce, is like $16 trillion. But if we suddenly doubled our money supply, then the GDP would be, nominally, $32 trillion. Same loaves of bread and haircuts, but now “worth” twice as many dollars. Kinda like the story of the boy who sold his dog for a million dollars. Dad asks how he got so much money. Boy replies “No, I got two, $500,000 cats…”

Same with our stock market. Right now up to 14,000 on the Dow, but that’s not any more loaves of bread that the 10,000 Dow of just a few years ago.

Bad news — wealth effect makes people falsely confident, so they go spend and do other stupid things. Good news — at least it’s something of a hedge against inflation. You can still get the same number of (now more expensive) loaves of bread when you’re hungry.

The IRS says that families will be paying $20,000 for health insurance. It also says that the top penalty for failing to buy insurance is less than $3,000. Medical insurance companies can no longer turn away people with pre-existing conditions. This means that people can avoid the $20,000 fee, pay the small penalty, and buy “insurance” only at the time they need it. (Or, more accurately, buy “cost shifting” when they need it.) Can the insurance companies stay solvent under these circumstances?

If insurance companies cannot stay in business with this non-insurance fee structure imposed upon them from above, how will they change? Most are diversified. Will they simply abandon health insurance? They cannot refuse to pay onerous fees, because payments are forced upon them by law.

Will the death of insurance companies create a medical black market, where people pay cash for services? In a way, this wouldn’t be so bad, because it would do away with the moral hazard that comes from both huge insurance companies and government interference. With those huge systems, people have no incentive to shop around for better or more affordable treatment.

Take a step back. We must separate the various functions. First is health care provision. Doctors, nurses, drugs, hospitals, equipment… That is a service sector that will rise with demand and shrink with price-controls. Obamacare = less service, fewer doctors, worse outcomes.

Second is true insurance. You have a one in a hundred risk of losing 100,000 (car crash, home fire, serious illness). Being rationally risk averse you’ll gladly pay $1,000 (expected value of 1% times 100,000) as a premium. Heck, you’ll even pay like $1,500, just to be safe. That extra $500 pays for agents, and underwriters, and insurers’ capital, and all the rest.

Third is what we have today — redistribution masquerading as insurance. Young/healthy should pay a fair premium of like $4,000. Old/ill should properly pay $20,000. But Obamacare, to hide redistribution, says everyone will pay $12,000 each, the average of the high and the low. Insurers wouldn’t care how they get paid, EXCEPT the young/healthy aren’t stupid. They won’t pay $12,000 for insurance worth (to them!) a mere $4,000. Hence the unconstitutional (shut up Roberts!) mandate.

(Side note — this use of phony insurance to hide redistribution is just the latest iteration of the continuing fraud. It starts with “tax Peter to pay Paul.” Steps then include high rates with unfair deductions, borrowing to tax the unborn, inflation to rob lenders and the poor, unfunded mandates, and finally scams like Social Security and Obamacare. Details on request.)

Ok, that’s the real economics. Now the politics. Even with all the arm-twisting, and bribing, and parliamentary cheats, and brief supermajority, Obamacare could NOT pass with anything close to the necessary punitive taxes needed to get the young/healthy. That’s why the penalty is so foolishly low.

But to the left, that’s a feature, not a bug. It’s OK if insurers get squeezed out of health insurance. They’re just capitalist parasites anyway, and we’re one day closer to single-payer, that is, a government-monopoly on when you die.

Obama’s Consumer Financial Protection Bureau is forcing banks to give unsecured, low-interest home loans again. These loans, and the machinations into which the financial industry entered in order to protect itself from the downside risk of such loans, triggered the 2008 recession. What will happen this time around? Will banks go out of business? Will they come up with some grand new scheme? I assume that, if they do the latter, it will implode. The last time, it took around two decades before the Ponzi scheme collapsed. How long will it take this time?

We have a problem that banks got “too big to fail” because of government distortions of the credit markets. The Fed taught markets that serious losses get “socialized” (fall on taxpayers, not the true failures).

We also have a problem that government misallocated credit via the “Community Reinvestment Act.”

So what does government do? Makes an utterly irrelevant move into more controls. Plus an additional misdirection of credit.

We do not learn from our mistakes. We simply make new and more subtle errors.

It’s like this. A hippo gets into the bathtub. Water overflows everywhere. Hippos declares an emergency and nationalizes all the towels…v

Why, if the economy is contracting and the labor market is flat-lined, has the stock market gone up?

Will the stock market stay up (long-term and short-term predictions, please)?

The IRS says that families will be paying $20,000 for health insurance. It also says that the top penalty for failing to buy insurance is less than $3,000. Medical insurance companies can no longer turn away people with pre-existing conditions. This means that people can avoid the $20,000 fee, pay the small penalty, and buy “insurance” only at the time they need it. (Or, more accurately, buy “cost shifting” when they need it.) Can the insurance companies stay solvent under these circumstances?

If insurance companies cannot stay in business with this non-insurance fee structure imposed upon them from above, how will they change? Most are diversified. Will they simply abandon health insurance? They cannot refuse to pay onerous fees, because payments are forced upon them by law.

Will the death of insurance companies create a medical black market, where people pay cash for services? In a way, this wouldn’t be so bad, because it would do away with the moral hazard that comes from both huge insurance companies and government interference. With those huge systems, people have no incentive to shop around for better or more affordable treatment.

Obama’s Consumer Financial Protection Bureau is forcing banks to give unsecured, low-interest home loans again. These loans, and the machinations into which the financial industry entered in order to protect itself from the downside risk of such loans, triggered the 2008 recession. What will happen this time around? Will banks go out of business? Will they come up with some grand new scheme? I assume that, if they do the latter, it will implode. The last time, it took around two decades before the Ponzi scheme collapsed. How long will it take this time?

I will appreciate any and all answers to these questions. I truly don’t understand what’s going on in today’s economic world. Incentives are flipsy-wopsy and trends make no sense.

With the election nearing, the Facebook frenzy is accelerating. I got this from a Facebook acquaintance:

Lots of food for thought, there:

Ryan voted to end funding for Planned Parenthood. Ryan’s vote is completely in line with Romney’s insistence that a broke U.S. government should repeatedly ask itself “Is this program worth going into debt to the Chinese?”

This is an especially good question, when it’s unclear why Planned Parenthood gets special funding status. If we’re saying women’s health care (including or not including) abortion is of transcendent importance, then we should just put aside a pot of money and let all health care programs apply by proving that they provide the best women’s health care for the least money. Alternative, we should give women vouchers entitling them to special services that are unique to women.

Of course, once we stop assuming that Planned Parenthood is automatically entitled to funds, and start questioning the services it provides and the benefits citizens receive, we’d better start giving men vouchers for services that are unique to men. For example, the feds could pay for women’s pap smears, breast exams, and well-baby checkups, and pay for men’s prostate exams, Viagra, and heart disease prevention and treatment (since men die from heart disease in proportionately greater numbers than women). Indeed, since men routinely die earlier than women do (sorry guys), men should get special longevity treatments, or they should get cash payments for those years that they die sooner, thereby saving the government money. And really, if we’re going to break it down this way, by looking at both need and savings, we’d better have special vouchers for African-American men who, sadly, have significantly greater health risks than their white or Asian counterparts. They should get both bigger vouchers and a cash discount for being virtuous enough to die before they cost the government too much money. (And wasn’t it the Progressives who want bat bleep crazy when they learned that a cigarette company argued that smoking is really a benefit for socialized medicine because people die sooner, rather than being a lasting burden on the system?)

This is so confusing. I have a really good idea: How about the government stops funding special interests and starts promoting a competitive market for quality health care?

He wants to overturn Roe v. Wade with no exceptions for rape or incest. All thinking people want to overturn Roe v. Wade because it is a terrible malformation of American law. There is no right to abortion under the Constitution. There is also no federal ban on abortion under the Constitution. Abortion is not a federal issue. It’s a state issue. Roe v. Wade should be overturned, with the abortion question then being returned to the various States. They will do what they will, and each state, by looking at the others’ experiments regarding abortion, will be able to decide what is the best policy, either generally or specifically (i.e., for a given state’s finances or morals).

The Ryan budget plan would dismantle Medicaid. How often will Ryan have to repeat that Medicaid will be there for those who have vested or who are near vesting? Don’t answer — that’s a hypothetical question. I know that no Progressive will ever believe him or the laws he’s proposed. And how often will Ryan have to repeat that Medicaid will continue to be there for those younger people who want it, but that the government will facilitate market-based insurance for those who don’t? Yup. That’s another hypothetical. [UPDATE: Me being dyslexic and confusing Medicare and Medicaid. Sorry. Medicaid is a state program which is going to get royally reamed under Obama. He's giving short-term benefits now and then transferring the entire burden to the various states, many of which are currently looking for ways to run and hide. I suspect that the Ryan budget plan can't be worse than the current situation, but I have to run now, and cannot confirm that belief. Anyone want to volunteer information?]

(A) the right to life guaranteed by the Constitution is vested in each human being, and is the paramount and most fundamental right of a person; and

(B) the life of each human being begins with fertilization, cloning, or its functional equivalent, irrespective of sex, health, function or disability, defect, stage of biological development, or condition of dependency, at which time every human being shall have all the legal and constitutional attributes and privileges of personhood; and

(2) the Congress affirms that the Congress, each State, the District of Columbia, and all United States territories have the authority to protect the lives of all human beings residing in its respective jurisdictions.

“Extreme and dangerous”? Really? What the bill states is a biological truth. The real question isn’t when life begins, it’s when each citizen has the power to end another person’s life. For the most part, we all agree that, once someone is born, a fellow citizen cannot arbitrarily and without government due process, terminate that born person’s life. The question is whether an individual can act to terminate a pre-born person’s life and, if so, when. As long as Roe v. Wade exists, does it matter that Congress symbolically affirms that government entities have the right to protect life on their soil? No, because Roe v. Wade gives the faux-constitutional final word to the woman. And if Roe v. Wade is overturned, all that the bill does is say what the Constitution already implies, which is that the individual states have the power to make such laws. So I ask again — “Extreme and dangerous”? Really? Symbolic, maybe; but practically meaningless.

He has repeatedly tried to repeal the “Affordable Care Act,” which banned insurance companies from charging women more than men. Okay, in item one, above, Planned Parenthood implicitly conceded that women’s healthcare is more expensive than men’s, which is why the government (in Planned Parenthood’s view) should subsidize it. So Planned Parenthood is either saying legal businesses should operate at a loss, or that they should arbitrarily increase men’s insurance rates to subsidize women’s. In that vein, I think Congress should also pass a law saying that teenage drivers shouldn’t pay any more for car insurance than a 40-year-old woman. Never mind the statistics showing which driver is more likely to cost the insurance company money.

But while I’m talking about laws, if Planned Parenthood’s only concern about ObamaCare is those “equal” insurance rates, why not repeal ObamaCare, which is a 2,700 page monstrosity that adds an enormous amount to America’s debt load and has seen substantial cost increases for currently insured Americans, and in its place enact a very simple bill? The new bill could say “Women must be charged precisely the same for health insurance as men. Insurance companies may achieve this goal by raising men’s rates or lowering women’s, whichever they prefer. There. That was easy.

If we’re looking for serious government subsidies, I think the federal government should create a subsidy for reason-challenged Progressives. It could fund emergency six-week long classes on Socratic-based logic and reasoning.

Conservatives of all religious stripes have been attacking the ObamaCare mandate regarding birth control and abortifacients on religious grounds. The Obama administration’s response was to introduce an “accommodation” under which the insurance companies will henceforth offer these medicines and services for “free.”

Anybody past the age of five understands that, in this life, nothing is free. The same opponents immediately pointed out that religious institutions and people of conscience will still be funding an insurance package that includes morally reprehensible products. After all, someone has to pay, right?

Wrong! says the administration. No one has to pay because all “health care” products have a negative cost effect on the insurance companies. By forcing the companies to provide preventive services for free, the Obama administration is actually saving the company’s money. Never mind the fact that, in the real world, if there really was a cost savings, the insurance companies would already be offering these products and services for free — and then, in order to compete in the insurance market, they would be passing these savings along to their customers.

Aside from ignoring marketplace realities, the Obama administration is apparently lying as well:

[T]here is no evidence that a mandate on insurance companies to provide contraception is cost-neutral. A search of PubMedturns up nothing.

Tory Bunce, policy director at the conservative Council for Affordable Health Insurance, told IBD, “In our research, we’ve looked at the cost of mandates on the state level. We’ve asked our members to price these mandates in their actual policies. What we’ve been told from the actuaries is that the contraceptive mandate costs 1%-3% of premiums.”

Read more here about yet another administration lie, one that a complicit MSM cheerfully passes along to a credulous public.

Reconciliation is a red herring. Right now, the House is being promised that, if it votes on the Senate bill, the Senate will fix differences between the two bills through reconciliation. So everyone is focusing on whether the Senate will indeed have the votes for reconciliation. That is irrelevant. Once the House, with that carrot dangling before it, votes on the Senate bill that bill will become law. Reconciliation will vanish! Poof. Gone. The thing we need to do is stop worrying about reconciliation in the Senate and start focusing on the House itself.

If you live in a District with a liberal House member, as I do, my suggestion for derailing that Representative’s vote is to taunt that person for selling out to the insurance companies. After all, while government is taking over providing health care, each and every one of us will still be forced to pay big bucks to an “evil insurance company” to pay for that health care. This is a twofer, in other words: a government takeover and an unprecedented corporate boondoggle. Your liberal representative is excited about the government takeover, but the base can still be inflamed over that corporate giveaway.

In any event, that’s the tactic I tried with my Representative, telling her that a “yes” vote on the Senate bill would mean that she’s now owned by the insurance companies. My thinking was that you have to argue with people in terms they understand.

UPDATE: Rush corrects the flaw in my thinking and explains precisely why Lynn Woolsey and others of her stripe are all for this bill, one that ostensibly forces people to buy insurance. Two things: First, the penalty for failing to buy insurance is hugely cheaper than the cost of buying insurance. Second, insurance companies are no longer going to be allowed to play the odds of calculating whether some will get costly illnesses and others won’t. Instead, under the Senate bill, they must sell insurance to people after they get sick. Meaning, as Rush said, it’s not insurance at all. Under this scheme, the only ones who will get insurance are people who are already sick, which will quickly bankrupt the insurance system. Once that happens . . . voila! Public option.